Innocent Sellers Act returns to the Hill

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The National Lumber and Building Material Dealers Association (NLBMDA) commended Rep. Blake Farenthold (R-Texas) for his reintroduction of the NLBMDA-promoted "Innocent Sellers Fairness Act" (H.R. 2746) that would provide product liability protection to those businesses that only sell products and did not manufacture them.

"NLBMDA applauds Representative Farenthold for his effort to bring balance to our legal system by recognizing that business owners that only sell products, and are not involved in the manufacturing process, should not be held liable for defects that they did not create," said NLBMDA chairman Chuck Bankston, president of Bankston Lumber in Barnesville, Ga. Unfounded and unfair lawsuits are increasingly having a negative effect on the ability of building material dealers and distributors to run their businesses and contribute to their communities. According to a 2010 study by the U.S. Chamber of Commerce Institute for Legal Reform, small businesses bear 81% of business tort liability costs.

The high costs of defending product liability lawsuits have caused many building material dealers to settle, regardless of the merits of the case. Current law imposes liability without wrongdoing on sellers and exposes them to all of the damages allegedly suffered by a plaintiff, even though other defendants may have played the critical role in causing the damages. The "mistake" may have been in the manufacture or design of the product, or in a customer's improper use of the product, yet the seller is often faced with some or all of the liability.

"No amount of care can free a seller from disproportionate product liability, and plaintiffs' lawyers know this --they routinely sue anyone in the chain of distribution of a product, often forcing settlements out of otherwise innocent merchants. These abusive product liability cases are part of a growing litigation burden on our nation's small businesses and our economy," said NLBMDA president and CEO Michael O'Brien. "This legislation will bring some sanity back to our legal system, and we urge Congress to act swiftly on H.R. 2746."